Petters Ponzi clawback targets Bachmann-Vennes connection

The long arm of the Tom Petters Ponzi scheme clawback has
reached out for Congresswoman Michele Bachmann in an effort to recover $27,600
in contributions to her congressional campaign from Petters associate
and Bachmann friend, convicted money launderer Frank Vennes Jr.

The move came
in an "adversary case" complaint filed in U.S. Bankruptcy Court proceedings in the
Southern District of Florida for the Palm Beach Funds. These were Palm
Beach, FL- and offshore-based
hedge funds allegedly used by Vennes to steer billions of dollars
into the Petters Ponzi.

Barry E. Mukamal, liquidating trustee for the bankrupt Palm
Beach Funds, filed the action November 29 against Michele Bachmann, Bachmann
for Congress, and Bachmann Minnesota Victory Committee. It identifies seven
contributions to Bachmann’s congressional campaigns made between December 2005
and June 2008 that it seeks to recover for the Palm Beach Fund creditors. Based
on Federal Election Commission records, those contributions were made by Frank
Vennes Jr. and his wife, Kimberly.

Because the donations were made with Vennes’ allegedly
ill-gotten gains from the Petters Ponzi, the complaint seeks to recover them
for the Palm Beach Funds, which are now creditors of Vennes. According to court
documents, from 2002 through September 2008, the Palm Beach Funds invested
approximately $8 billion in PCI (Petters’ company) notes. As of September 24,
2008, when the Petters Ponzi came crashing down, the Palm Beach Funds had more
than $1 billion invested in PCI.

Vennes earned more than $60 million in commissions paid by
Petters and/or PCI for the Palm Beach Fund investments based on a percentage of
the money he attracted. Vennes was indicted July 19 on 24 counts of fraud, money
laundering and making false statements, many of them related to his involvement
with the Palm Beach Funds.

David William Harrold and Bruce Francis Prevost were owners
and managers of the Palm Beach Funds. Vennes recruited the two to raise money
for Petters and Petters’ company, PCI. The arrangement netted Harrold and
Prevost more than $58 million in fees under their agreements with the Palm
Beach Funds.

Harrold and Prevost were indicted along with Vennes in
April. They pleaded guilty to securities fraud in the scheme and reportedly are
cooperating with federal authorities.

The November 29 complaint says that Bachmann and her campaign committees were “unjustly
enriched” by their receipt of Vennes’ campaign contributions, which occurred
while Vennes was “committing these tortious acts and receiving transfers from
the Palm Beach Funds.”

The complaint concludes:

“The Defendants’ [Bachmann] receipt of the benefit of the
Transfers unjustly enriched the defendants to the detriment of Vennes and his
creditors.

“Under the circumstances set forth herein, it would be
inequitable for the defendants to retain such benefits.”

THE BACHMANN-VENNES CONNECTION

Bachmann previously has tried to wash her hands of some of
Vennes’ “dirty money.” Following FBI raids on Vennes’ and Petters’ homes in
2008, Bachmann quickly moved to donate $9,200 of Vennes’ and his wife’s money
to charity. However, that represented only a portion of the more than $50,000
Vennes and his family and personal lawyer gave to Bachmann from 2005-2008.

Ripple in Stillwater asked over a year ago why political contributions of fraudsters and Ponzi men weren't being clawed back.

Vennes was donating heavily to Minnesota
politicians throughout most of the last decade as he sought a presidential
pardon for earlier crimes unrelated to the Petters Ponzi.

Vennes was convicted in North Dakota of money laundering and
illegal firearms and cocaine trafficking charges in 1987, served 38 months in
federal prison in Sandstone, MN, and a decade or so after his release, began laying
the groundwork for his presidential
pardon.

Vennes and his family were among Bachmann’s heaviest campaign
contributors. Bachmann wrote a glowing letter
of support for Vennes’ pardon on December 10, 2007, even though Vennes, a resident of
Shorewood, MN, and Jupiter, FL, was not and never had been a constituent.

“As a U.S. Representative, I am confident of Mr. Vennes’ successful
rehabilitation and that a pardon will be good for the neediest of society,” Bachmann
wrote to the Office of Pardon Attorney. “Mr. Vennes is seeking a pardon so that
he may be further used to help others. As I know from personal experience, Mr.
Vennes has used his business position and success to fund hundreds of nonprofit
organizations dedicated to helping the neediest in our society.”

Bachmann noted that Vennes needed a pardon because he “still encounters the
barriers of his past and especially in the area of finance loan documents.”
Bachmann has refused to further explain the nature of her “personal experience”
with Vennes or provide clarification of the finance loan documents to which she
refers in her letter.

Vennes family members Norma Vennes (Frank’s mother), Colby
Vennes and Denley Vennes (Frank’s sons), seeking funds that are alleged to have
been fraudulently transferred from Metro Gem, Inc., one of several feeder funds
for the Petters Ponzi scheme managed by Frank Vennes. Other Vennes family members targeted by the clawback made
significant political contributions to Pawlenty and the Republican Party of Minnesota.
It’s not known whether they will be subjected to clawback attempts by the Palm
Beach Funds as well.

Some of these institutions have close connections to Vennes. Vennes served on
the boards of Minnesota Teen Challenge and NorthwesternCollege. Some of these
institutions, like Desiring God Ministries (whose Pastor John Piper wrote
about an anti-homosexual-tornado) and Minnesota Teen Challenge were
involved in the strange
saga of Hope Commons.

This week’s clawback action suggests that the shadow of
Frank Vennes Jr. will continue to cloud Bachmann’s political future well into the
presidential caucus and primary season. For a candidate who can barely explain
away her present—let alone her past—that can’t be good news.

24 comments:

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Ripple in Stillwater

Ripple in Stillwater is the sole creation of Stillwater, Minnesota, writer Karl Bremer. It covers whatever captures the author's muse at the moment. You can reach Ripple in Stillwater at saintcroix-at-aol-dot-com, or you can follow me on Twitter @kdbremer. If you're wondering about the name of this blog, go here.

Minnesota Society of Professional Journalists 2011 Page One Award Winner

Ripple in Stillwater author Karl Bremer won Second Place in the Minnesota Society of Professional Journalists 2011 Page One Awards for "Best Use of Public Records."

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